Posted by: patenttranslator | March 20, 2017

For Sale by Owner and For Sale by Translator-A Tale of Two Industries

Over several decades as a home owner, I have been following trends in real estate and comparing them in my mind to another industry that I have also been part of and have gotten to know quite well over the last several decades: the “translation industry”.

If you want to buy a house here in the United States, you basically have three options to choose from:

  1. If you know what you are doing, you can simply do it on your own, without a real estate agent. Although this option could save home buyers a lot of money, very few people do it this way, probably because the logistics and risks inherent in a transaction involving a great deal of money are simply too intimidating.

Very few people, around 1 percent of home sellers, choose this option.

  1. You can buy (or sell) your house through a cut-rate type of real estate agency called For Sale by Owner. Unlike most real estate agencies, For Sale by Owner charges a much lower flat fee of only a few thousand dollars that is independent of the sale price of the house, in exchange for providing limited support.

Although the logistics are basically taken care of, the homeowners have to sell the house on their own, without the assistance of a real estate agent. Relatively few people, less than 10 percent, decide to choose this option.

  1. You can sign up with a real estate agency providing the full range of services that real estate agencies offer, including the assistance of a sales agent who gets paid only if the house is sold.

However, the commission that you have to pay for this service is fairly substantial, between 5 and 6 percent of the price for which the house eventually sells. Since the average price of an average house in an average neighborhood (assuming there is such a thing) in Virginia is about 300,000 dollars, while in Northern Virginia it is about 500,000 dollars, homeowners have to pay a lot of money if they sign up with this kind of traditional real estate agency.

A few years ago, many real estate agents were fearful that it was only a matter of time before the internet would put them out of business, and this is precisely what the internet did to many other professions, such as travel agents and bank clerks.

The real estate industry was in a panic. All the information they used to rightfully (in their mind) own was now on the internet and anybody could access it.

When a new internet-based business model was created for selling real estate represented by firms such as Realtor.com, Trulia.com, Redfin.com, or Zillow.com, many in the industry expected that commissions would be slashed in an era when buyers suddenly had instant access to all the information that only real estate agents could access a decade or two decades before.

But it turned out that these fears were unwarranted – there are even more real estate agents now, who are finding, selling and buying houses for their clients than there were a decade ago, and the most common commission in the industry is still 6 percent of the sale price, half of which goes to the agent, and half of which goes to the real estate agency.

Prices on the real estate market collapsed in this country after the real estate bubble artificially created by our friends on Wall Street popped. Wall Street made out like the bandits they are from the crises they themselves created, in 2006 – 2008. But in most of the country, prices are now right back where they were around 2006 (which may or may not mean that another real estate bubble is about burst – I do wish I knew the answer to this question, but I don’t).

So one could say that the real estate industry, and real estate agents in particular, survived the boom and bust cycle typical of the industry, aggravated by the danger of threats to the industry from the internet, quite well.

Most buyers still prefer to pay tens of thousands of dollars for the privilege of being assisted by a helpful real estate agent who will hold their hand and whisper sweet nothings in their ears – such as the high prices of “comps” (similar houses) in the neighborhood and advice on how to stage the house for a sale, as I did on two occasions when I bought and sold my house.

The Sale by Owner method is just too scary for most people. The internet did not disrupt the traditional method of selling real estate – on the contrary, most real estate agents take advantage of the new capabilities that became available to them, using the internet for marketing purposes, such as creating virtual tours of houses for sale and tempting buyers to part with their hard-earned money.

If what you need is a translation rather than a house, there are also three main ways to go about it:

  1. A company can create its own in-house translation department and employ people called in-house translators, who receive a salary for translating. This is exactly what some companies, mostly large ones but also some smaller ones do, and I was employed for a while as an in-house translator, once in Czechoslovakia and once in Japan.

But relatively few companies do that – only those that need to translate large amounts of material, generally on a daily basis.

  1. A company or an individual can also contact one of hundreds or thousands of businesses, mainly translation agencies advertising translation services on the internet. Some companies create an in-house department staffed by people who are not translators themselves, but instead work as managers, multilingual and specialized managers of freelance translators. I used to work for a major manufacturer of chemicals as a freelance translator in this manner and from a New Year’s card which had pictures of all of the translators working for the company, including mine, I saw that the company worked with 94 freelance translators.
  1. A company or an individual can contact one of hundreds or thousands of individual translators who, theoretically, should also be findable on the internet, without the intermediary of a translation agency.

While the internet did not cause major changes to the real estate industry, it certainly changed the “translation industry” and from the viewpoint of individual translators, definitely not for the better.

Three are of course many important differences between these two industries, so many in fact that they are not directly comparable. But I also see some commonalities.

I see the real estate industry as a legitimate industry providing an important service in a much more honest manner than the “translation industry”. The “translation industry” does create important value, but only in the sense that it brings together somebody who needs something to have translated with a translator who can do the work.

Unlike in the “translation industry”, everything is out in the open in the real estate business. The clients have direct contact with the real estate agents, and because they know them more or less on a personal basis, they can rely on their instincts and intelligence to make a personal decision about whether they want to trust an agent who provides a direct, personal service.

The last time I worked with a real estate agent, she and her colleague offered to walk our three dogs when we did not have the time to do so and the dogs had to go. Both we and the dogs were very grateful for the offer.

Clients buying a house are also perfectly well aware of how much they are paying the agency and what the real estate agent’s cut will be, as well as the real estate agency’s profit. There are no secrets there.

While real estate agencies encourage their agents to advertise directly to potential clients, translation agencies specifically prohibit translators under the intimidating threat of hefty penalties or a lawsuit, from trying to contact direct clients (I just read on LinkedIn that a Czech translation agency is forcing translators to sign an NDA specifying that the penalty for breaking any of the clauses in the NDA is 20,000 Euros).

The fact that the “translation industry” is trying so hard to make sure that clients never come into contact with actual translators is an explicit admission that translation agencies realize perfectly well that if clients knew how to contact translators directly, many would prefer to do business directly with them because they understand that a translation agency generally does not create any additional value.

That is why so many translation agencies try to force translators to sign very long “Non-Disclosure Agreements” whose main purpose at this point is usually not maintaining the confidentiality of the client’s information, which used to be their original, legitimate purpose. Instead, NDAs now try to make sure that the translator cannot communicate about anything related to the translation agency (such as translation rates being paid to the translator, or how long it takes to pay) with other translators, and most importantly, that the translator will not dare  compete for direct clients with the translation agency.

The “non-compete clause” is currently formulated in many contracts, which are called misleadingly “Non-Disclosure Agreements”, to prevent any possibility of a contact between a translator and a direct client because these contracts are clearly meant to prevent any potential competition on the part of translators, which is in fact an illegal request, at least based on antitrust laws here in the United States.

Translation clients have no idea how the payment is split between a translation agency and a translator; in fact, many probably never even consider the fact that the agency and the translator are not one and the same.

I wonder how it’s possible for translation clients to fall so easily for the other half-truths and misinformation frequently used on websites of translation agencies, how they can be taken by the transparent verbiage about three highly-experienced translators perfecting the translation, and complying with quality assurance standards. Quality assurance standards that are similar to industrial quality assurance standards applied for example to diapers and toilet paper (obviously, there can be no such standard applicable to “translation” – this is again a marketing trick). Marketing propaganda works wonders!

And the “translation industry’s” marketing propaganda does seem to work.

Real estate agents have been able to use changes brought about by the now nearly omnipresent availability of Wi-Fi to their advantage. Just about every real estate agent has a beautiful website that can be easily found by potential clients, and the rates paid by real estate agencies are still 6 percent of the sale price, at the same level where they were 20 years ago. But the rates that many freelance translators can expect to be paid by translation agencies has taken a serious nose dive.

Even without taking into account the effect of inflation, the rates that “the translation industry” is now paying to those translating for them are much lower than what they used to be 20 years ago.

I think much of the blame for why the results for those doing the actual work in the real estate industry and in the “translation industry” differ must fall squarely on the shoulders of translators themselves.

Many did not seem to realize early on, and still do not realize, that if they if they fail to make the internet serve them (by choosing a suitable domain name that will be found by search engines, and creating a professional-looking website that will induce direct clients to cut out the middleman and dump a translation agency), the translation industry will continue using the internet against translators and treating them as poorly paid, indentured servants.

Few home owners are interested in selling their homes without the assistance of an experienced real estate agent because there is so much work and a lot of risk involved in something like that.

On the other hand, many direct clients would be only too happy to cut out the middleman and work directly with the translator … if they could only find a suitable one on their own.

If you run a Google search to determine the current prices of houses in your neighborhood, Google will list on the first page not only large real estate agencies eager for your business, but also impressive websites of individual real estate agents who specialize in your regional market.

But if you run a Google search for a translation service specifying precisely your subject and language combination, almost invariably only translation agencies will be listed.

Relatively few translators are findable, on the internet or otherwise, as too many translators, even very good and highly experienced ones, continue to sell their skills and labor for the most part to the “translation industry”, regardless of how poorly they are paid and how much they are being abused by this industry.

I don’t know how to explain the differences between what is happening in the real estate industry and in the “translation industry”. But I do know that unless things change, translators will continue to be abused by the industry even more than they are now.

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Responses

  1. Wow, all I can say is that the real-estate business in the US must be a very different beast from in the UK! Here you’d be hard-pressed to find an agent charging more than 1.5%, but then I suppose if prices are moving ever upwards (as they have been until recently) perhaps they do all right even so.

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  2. I did not know that. I do know that there are many other differences between the real estate situation here and and in Europe. Fore example, mortgage interest rates are twice as high or higher here than in most European countries or in Japan – that is why most people here have to go for a 30-year mortgage, while in Europe 15-year mortgages are much more common, and property taxes are also much, much higher here than in most European countries, 10 or 20 times higher.

    But most most people have no idea.

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  3. “the blame for why the results for those doing the actual work in the real estate industry and in the “translation industry” differ must fall squarely on the shoulders of translators themselves.”

    If my research efforts and observations have taught me anything about both the translation profession and the translation industry, it is very much the colossal ignorance on the part of many translators, including those with PhDs.

    To be fair: “not all who carry large dictionaries are ‘professional’ translators”. And herein lies a large part of the problem. The lack of barriers to entry into the profession means that the academic/professional qualifications of practitioners range from PhDs to none at all. As a result, calling oneself a ‘translator’ says nothing useful about one’s ability to translate or one’s level of professionalism.

    As I have said before, until we distinguish/differentiate ‘professional’ translators from ‘non-professional’ translators, nothing will change. I would have thought this to be the primary role of the translator’s associations and institutes. Since this does not appear to be case, it is clear to me that the level of ignorance referred to above, is wide-spread, even among those who set themselves up as spokespersons for the profession.

    I am slowly getting to the stage of giving up on the ‘profession’ as a lost cause.

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  4. I despair at times, but I have not given up yet on the profession. I intend to keep writing my blog for a few more years.

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    • Despite your efforts and others including myself, I get the feeling that much of the ignorance within the profession is a refusal/ability to examine the problem and acting to rectify the situation. A lot of it appears to be unconscious ignorance.
      To quote John Heywood: “There are none so blind as those who will not see”. When reading some of the comments on various blogs, I have often been struck by the confident exposition of theories firmly rooted in complete ignorance of how the world works.
      Clearly, education is not what it used to be.
      University courses are now largely ‘vocational training’ in the English-speaking world.

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  5. Vocational training seems to be one of the missing links here. We don’t really have solid vocational training for many occupations, such as car mechanics or electricians. Lot of fake private schools take advantage and offer very expensive fake courses to young people who go into debt to graduate, but then cannot find a job after graduation.

    Every few years there seems to be a big scandal about financial and other improprieties at one of these schools at the point when the school finally has to declare bankruptcy.

    I wonder if the situation is better in Australia.

    Liked by 1 person

    • We have similar problems here as Commonwealth and state governments shed their responsibilities by contracting out its services or privatises its publicly-owned corporations (power, water, etc.).
      There is overwhelming evidence that this does not work and costs more that before, but it seems that facts are not a criterion any more (thanks for showing our leaders the way).
      Our government tends to follow the UK and the US (because they speak English and act with the confidence of people who firmly believe they are exceptional and therefore know best, prrrffft).
      Foolish, but it seems we cannot interest our leaders into studying what succeeds in Scandinavia and other very successful countries in northern Europe (because they speak with a funny accent 🙂

      Liked by 1 person

  6. I was contacted last year by an Eastern European agency. However, their contract contained an NDA clause that was really a five year non-compete, so I told them I wasn’t going to sign it.

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  7. Steve, high time you realized there are no translators. I’m not joking. Agencies all over the world are working hard to destroy this profession even before it has been defined as one. I’ll try to explain what I mean by a specific example. Imagine I were a girl from a language school in Eastern Europe, and I went into contractual relations with a global translation agency (LSP or whatever its name). You’d say, they wouldn’t approve of my application. Yes, Steve, they would! I repeat, I’m not kidding. Then I, the girl, would start translating from a foreign language into a foreign. Willingly, and for peanuts (good fees for me, peanut for you).

    Now, do you think I’d ever be willing to get in touch with the clients I translate for while believing I’m translating for the agency? I, the schoolgirl from Eastern Europe?

    No, of course, clearly not.

    That’s the simple principle of operation of all fraudulent intermediaries, not only of translation agencies. It’s easy and it works.

    So stop wondering why qualified translators sign so-called NDAs. There certainly are a few – or, rather, VERY FEW – qualified translators forced to agree to a clause as to never try and get in touch with a client (stupid, foolish, nonsensical!), but most of the “translators” who sign it are not qualified. Not at all. That’s why the agencies don’t want to give their names and contact details. You do the same, perhaps unconsciously.

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    • That girl from a language school was you, right?

      I believe you, stranger things have happened.

      When I was working as an in-house translator in Japan, although I protested that I am not really qualified to do that, my boss made me translate from German to Japanese.

      So I was dictating my translation to a Japanese secretary, a very smart girl whose spoken German was pretty good (she loved the fact that we could talk in German together), although it was not good enough to be able to translate from German to Japanese.

      So she was listening to my Japanese translation, or interpretation or whatever you want to call it, while taking an occasional look at the German, and typing the translation in Japanese.

      Like they say, there is more than one way to skin a cat.

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  8. Let’s not hurt each other. The problem is quite painful. I join Loius in his sad opinion, “I am slowly getting to the stage of giving up on the ‘profession’ as a lost cause.”

    Clearly, the future belongs to machine translation + some post-editing by low-qualified, badly-paid, easily replaceable wretches.

    With so many intermediaries all claiming they do the work and never letting any contact between the client and the translator, and with no control over their fraudulent practices, what else can be expected?

    As you correctly write, “I see the real estate industry as a legitimate industry providing an important service in a much more honest manner than the “translation industry”. The “translation industry” does create important value, but only in the sense that it brings together somebody who needs something to have translated with a translator who can do the work.”

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  9. But the “translation industry” is not the same as our profession. The industry is trying its best to kill us off and replace us by machine translation and poorly paid “newbies”. As you might have gathered from my posts, I don’t intend to cooperate with it in its mission by digging my own grave.

    I do not consider myself to be part of the “translation industry”, either when I work as a translator, or when I work as a translation agency.

    A very significant part of the entire translation market is served by people who I do not consider being part of the “translation industry”.

    The “translation industry” is not the world.

    It is harder for translators to make a living now, but that does not mean that the profession is dead.

    Dum spiro, spero.

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  10. “I do not consider myself to be part of the “translation industry”, either when I work as a translator, or when I work as a translation agency.”

    The castle surrenders from inside, as the saying goes (I don’t know its English equivalent).

    The propaganda dictates us to be “successful”, to develop our business, etc. What does being successful mean? Here’s the key to the answer why translation business is killing its main “players”.

    When I graduated from university at 47 with a degree in English Language and Literature, I felt proud and “successful”. I planned to build a large translation company offering all kinds of services and all languages. My plans soon failed for reasons independent of my will: my father got ill and died, I myself had problems with my health, I didn’t dare to take a bank loan, etc. So, I gave up on my business ambitions.

    A few years later, I started to realize that the organization of translation business was wrong. Although we’re all translators, every language is a separate sub-profession in the profession in as much as I can’t do the work my husband does: translations from and into Serbian and Croatian, and ditto with any other language.

    I realized that translation is a special type of activity called intuitu personae in Latin (in view of the person), and not just business in the sense of sale of products. I had given you and example with doctors of medicine, remember? And just like a gynecologist, say, can’t offer all kinds of medical services, so an English-Bulgarian translator like me can’t offer all kinds of translation services. Everyone is responsible for their area of expertise: the gynecologist for gynecology, me for En-Bg.

    What translation agencies are doing is pretending they’re like sort of big hospitals. In practice, each “hospital” consists of one or two “doctors” and a few members of administrative staff. That’s all. By pretending they have everything to “treat” clients, they perform fraudulent practice.

    While no hospital would be allowed to open doors in such poor conditions, thousands of translation companies are. There’ no control.

    Unfortunately, colleagues translators are also enticed by the idea of opening an “empty hospital”. That’s why I started this post with the saying about the castle surrendering from the inside. Well, I don’t accuse them. I see them as victims to the propaganda of successful business. Ignorance, as Louis put it. Total ignorance.

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